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KLM Royal Dutch Airlines

Based in Amsterdam, KLM is the national airline of the Netherlands. Part of the Air France-KLM Group, KLM operates an extensive network which includes services within Europe and to Asia, Africa, North America, Central and South America and the Middle East. KLM is a founding member of the SkyTeam alliance.

Location of KLM Royal Dutch Airlines main hub (Amsterdam Schiphol Airport)


 
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2,721 total articles

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230 total articles

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Air France-KLM struggles: 2Q profit falls on currency, weak unit revenue. Long haul under threat.

25-Jul-2015 1:10 PM

All is not well in Air France-KLM. The group has reported another decline in quarterly profits. Its 2Q2015 operating result was down by 2% and insufficient to bring 1H2014 into positive territory after an operating loss in 1Q2015. Currency movements, specifically the weaker EUR versus USD, had the effect of inflating both revenue and costs, but the net impact accounted for the deterioration in the operating result.

Nevertheless, this should not detract from Air France-KLM's very weak unit revenues, which appear immune to attempts at improving the product and may only respond to capacity cuts. Either way, unit cost reduction will remain crucial if the group is to return to a sustainable profit path. Long haul routes in particular are under threat.

The development of its medium haul low cost airline, Transavia, continues to be rapid in France, but the scale and profitability of this operation are weak compared with Europe's leading LCCs. However, the establishment of Transavia Europe, with bases beyond France and the Netherlands, could be back on the agenda after a change in leadership at the French pilot union.

Air France-KLM SWOT: more boldness needed to develop partnerships and to grow Transavia

10-Jul-2015 3:38 PM

Air France-KLM's 6M2015 passenger traffic figures indicate RPK growth of just 0.7% for the group, compared with 5.8% for IAG and 3.6% for the Lufthansa Group. With a passenger load factor of 84.2% for the period, Air France-KLM is filling more of its seats than IAG (79.3%) and the Lufthansa Group (78.3%). Its capacity discipline is welcome, but has been forced on it by successive losses.

Moreover, its poor financial track record highlights the challenges faced by Air France-KLM in making a profit from these seats - and cost cutting remains a priority. Key to this is labour productivity improvement. A recent agreement signed by KLM pilots is a positive step in this regard, by contrast with ongoing deadlock between Air France and its pilot union.

In this report, we consider Air France-KLM's main strengths, weaknesses, opportunities and threats.

We suggest that Air France-KLM should be more positive in developing commercial relationships with Etihad and Chinese partner airlines and more aggressive with the growth of its LCC subsidiary Transavia (if pilots allow it).

ACI Europe promotes open skies; a resounding precedent for airlines and other airports to follow

26-Jun-2015 5:15 PM

Aviation in Europe has a PR problem, which is not helped by the fragmentation of industry representation. Efforts to consolidate representation have so far not yielded material results. Europe's five largest airlines are now attempting to seek common ground, prompted by the European Commission's consultation on a new aviation policy. However, they are avoiding obvious sticking points such as protectionism with regard to competition from Gulf-based airlines. By contrast, airport representation is unified in ACI Europe, which has also responded to the Commission with a liberal set of policy proposals.

Recent changes in the membership of Europe's main airline representative bodies have seen ELFAA become its biggest airline association, measured by its members' passenger numbers, ending the previous hegemony of AEA. IAG's legacy airlines defected from AEA to ELFAA due to differences of opinion over market liberalisation.

There has never been a greater need for a single voice on issues such as taxation and the infrastructure provision (both on the ground and in the air). Aviation needs to argue its case and more effectively promote its benefits to the public.

Norwegian Air Shuttle's attempt to obtain US rights for NAI. Part 2: Traffic impact on competitors

19-Jun-2015 4:00 AM

In Part 1 of this CAPA report on Norwegian Air International's application for a US foreign carrier permit, we discussed the policy debate that this has unleashed. We suggested that those opposing NAI were motivated by a desire to raise anti-competitive barriers against a new and more efficient business model.

This second part of our report looks at Norwegian's impact on the incumbents' traffic on its US routes, particularly on the five city pairs where there is at least one direct competitor that is calling on the US Department of Transportation (DOT) to deny NAI's application. Two thirds of Norwegian's US routes, accounting for almost half of its US seats and frequencies, are new markets.

Our analysis of data from OAG Traffic Analyser suggest that, on Norwegian's New York routes from the three Scandinavian capitals, it has both taken traffic from existing participants and stimulated market growth. On London to New York and Los Angeles, its smaller size and a market contraction make its impact less clear, but it is probably also attracting new traffic in addition to starting to take market share.

IAG, Lufthansa & Air France-KLM: don't risk RASK. Lessons from 1Q2015 unit revenue & capacity growth

8-May-2015 8:28 PM

The 1Q2015 financial results of Europe's Big Three legacy airline groups again highlight their diverging pathways. Although all three recorded improved results versus last year, IAG underlined its superiority by posting a positive operating profit in what is seasonally the weakest quarter.

CAPA analysis often highlights the importance of cost discipline and much of IAG's success relative to Air France-KLM and Lufthansa is due to the head start it gave itself in pushing restructuring, particularly of labour costs. This remains crucial.

However, the focus of this report is to analyse the 1Q2015 unit revenue (RASK) performance of the Big Three and the relationship between RASK growth and ASK growth. Our analysis confirms that RASK performs better under conditions of tight capacity discipline, but also highlights some crucial differences between the Big Three and between their major route regions.

Europe's airlines underachieve in profit margins, but LCCs typically perform better than FSCs

3-Apr-2015 8:55 PM

The last of Europe's stock market-listed airlines recently reported financial results for 2014, providing the opportunity to compare levels of profitability. Ranking them by operating margin, there is a wide range of performance from healthy double digit to negative figures.

LCCs typically performed better than legacy airlines. Most of the higher margin airlines improved in 2014, while most of those at the lower end of the scale suffered a fall in margins. Convergence of business models does not show itself in convergence of financial performance.

Beyond the listed airlines, Europe has a large number of mainly small and unprofitable airlines, which drag down the aggregate margin of the continent's airline sector. Europe's traffic growth and load factors are relatively healthy by world standards, but its margins are held back by its fragmented market structure.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.